For much of the past five years, drought and development were on a collision course. Just as the weather began to dry up in 2011, the housing industry began to recover from the 2008 financial crisis. California faced a massive housing shortage just as drought limited the water supply available for new development. And as those on the Central Coast well know, even the specter of water scarcity is used to slow or block new growth.

This year, California’s five-year drought came to a dramatic conclusion, with the recent Sierra snowpack survey at 200 percent above average—the wettest on record. In April, the governor lifted California’s declaration of drought emergency across most of the state.

Yet this immediate-term relief should not obscure the stark reality: California suffers a long-term deficit in water supply. The state’s population is projected to increase from 39 million in 2016 to 52.6 million by 2060. The U.S. Bureau of Reclamation expects that by 2030, California will face 5 million acre-feet of unmet water demand in an average year, and even more in a dry year. This is equivalent to the average annual use by 10 million households.

Locally, Lake Cachuma is only half full and some groundwater basins are depleted. Goleta Water District remains in a Stage III Water Shortage Emergency, which reflects a projected 26–35 percent supply deficiency. The City of Santa Barbara is also in Stage III with a 30 percent conservation target, and the City of Santa Maria is in Stage I with a 16 percent conservation target. Clearly, the drought is not over for Santa Barbara County.

So what does this mean for the future of Central Coast development?

First, California’s “new normal” of drought-to-deluge shows that conservation and diversification of supplies remain imperative. This cycle will only worsen with climate change. As a result, it is increasingly important for water providers to account for these new conditions in every aspect of water planning. In Santa Barbara County, water providers are responding by developing new local supplies, such as recent efforts by the City of Santa Barbara to refurbish its desalination plant, which will soon meet one-third of the city’s water needs. Carpinteria is looking to develop recycled water supplies to serve non-potable demands. And most of Santa Barbara County’s water providers are considering advanced treatment of wastewater to prepare for the future legalization of direct potable reuse (toilet to tap).

Next, the resistance to new development during California’s drought shows that most people do not realize that cities and counties plan for development in long-term planning documents, and that the old housing stock is responsible for the lion’s share of residential water use. In fact, the majority of homes in Santa Barbara County were constructed long before there were any water-conserving plumbing standards on the books. This is why all residents are required to reduce water during drought.

In contrast, water-efficient fixtures (toilets, showerheads, faucets) must be installed in new developments pursuant to the California Green Building Standards Code. Because state policies have succeeded in substantially reducing indoor water use, the new frontier in water conservation innovations focuses on outdoor use. Residential, commercial, industrial and institutional projects that require a permit, plan check or design review are subject to the state’s 2015 Model Water Efficient Landscape Ordinance, which restricts the amount of turf. New homes must be equipped with irrigation controls that adjust automatically to weather conditions and soil moisture. Some projects are making design modifications to collect rainwater and stormwater on-site and installing graywater systems.

Because new construction is water efficient and only accounts for 1 percent of the current California housing stock, most water providers smartly have not blocked new development. Instead, they recognize that water use in old homes must be addressed if California is to achieve considerable water savings. Some jurisdictions are adopting incentives to retrofit old houses and establishing “cash for grass” programs that pay homeowners to replace lawn with native landscaping. Locally, we’ve seen a dramatic shift away from large green lawns to gravel, native grasses, and succulents.

Goleta Water District and Montecito Water District are anomalies—in 2014, both enacted a moratorium on new water service connections. Given the local housing crisis and the possibilities associated with conservation and water neutral development (where developers retrofit old homes in exchange for water), moratoriums are unnecessary, stifle innovative solutions, and adversely impact the region’s economy.

Overall, drought has not slowed development in California, but is changing the way projects are designed and how they obtain water. Developers moving forward in this new environment (and the attorneys who advise them) may no longer rely exclusively on local water providers for service. Developers are advised to determine if a property has water rights, and, if needed, to purchase water from a third party. After determining the quantity of water available for a new project, the next step is to incorporate water conservation features into initial design plans. Many developers are going well beyond what is required under current laws by developing uber-efficient projects. Not only does this increase a property’s value, but it improves the likelihood that a project will be approved, and may also decrease local opposition. Smart development and the application of water savings technologies to old housing can achieve a seemingly improbable result: flat or even reduced water use while allowing for planned growth. These strategies prove it is possible to develop the housing needed to support the county’s growing population and workforce while living within our water supply means.